“We wrote this book to provide a practical guide for Virginia attorneys to analyze and resolve contract law issues. In addition to its overview of Virginia contract law, contract drafting techniques are discussed and numerous forms are included with comments on their use in Virginia. For both the novice and seasoned practitioner, Contract Law in Virginia also explores in a practical way the resolution of contract disputes through alternative dispute resolution and litigation.”- John V. Little, editor

Contract Law in Virginia takes the practitioner from contract formation to performance, as well as nonperformance issues. It distinguishes itself from other contract law books by examining how Virginia contract law interacts with other areas of the law. It also applies general legal principles of Virginia contract law to different types of contracts – from commercial contracts to real estate contracts. Special case law rules and statutes are highlighted that affect different types of contracts.

This 2016 edition provides essential updates to Virginia statutory and case law in select areas of contract law through 2015. A number of new decisions add clarity to what constitutes an initial material breach and excuses performance by a party under a contract, and when a liquidated damages provision may be enforced. Additionally, in the area of electronic contracts, more recent cases rely upon traditional contract principles such as notice of terms and assent to establish the enforceability of an electronic contract.

1.1 SOURCES AND ORGANIZATION OF CONTRACT LAW 1.101 Overview 1.102 Case Law 1.103 Virginia Statutes 1.104 Federal Statutes 1.105 United Nations Convention on Contracts for the International Sale of Goods

1.2 DEFINITIONS OF TERMS 1.201 Definition of a Contract 1.202 Glossary of Common Contract Terms

3.2 SCOPE OF THE STATUTE 3.201 In General 3.202 Representations as to Credit 3.203 Ratification of Contracts by Infants After Coming of Age 3.204 Promises by Executors or Administrators 3.205 Promises to Answer for Debt, Default 3.206 Agreements in Consideration of Marriage 3.207 Contracts Relating to the Sale of Land 3.208 Agreements Not to Be Performed Within One Year 3.209 Contracts in the Aggregate of $25,000 or More

4.6 CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 4.601 In General 4.602 Parol Evidence Under the CISG 4.603 Course of Dealing, Custom, and Trade Usage 4.604 Merger Clauses and Exclusion of CISG Provisions

APPENDIX 4-1: CASES ON STATUTORY CONSTRUCTION

CHAPTER 5: POLICING THE BARGAIN

5.1 MENTAL COMPETENCE 5.101 In General 5.102 Rebutting the Presumption of Competence

5.2 CONTRACTS OF MINORS 5.201 In General 5.202 Ratification and Disaffirmance

7.2 DISTINGUISHING BETWEEN INTENDED AND INCIDENTAL BENEFICIARIES 7.201 The “Clearly and Definitely Intended” Standard 7.202 The Federal “One Overriding Intent” Standard 7.203 Class Members Eligible to be Third-Party Beneficiaries 7.204 Requirement That Parties Contemplate a Third-Party Benefit at the Time of Contracting 7.205 Mere Receipt of Benefit or Harm Under Contract

7.3 PAROL EVIDENCE RULE 7.301 In General 7.302 Applicability of the Parole Evidence Rule 7.303 Application in Various Contexts

12.4 SPECIFIC PERFORMANCE 12.401 In General 12.402 Specific Performance Under the UCC 12.403 Specific Performance of Real Estate Contracts 12.404 Specific Performance of Other Types of Contracts 12.405 Establishing the Right to Specific Performance 12.406 Effect of Agreement That Specific Performance Is Appropriate Remedy 12.407 Effect of Liquidated Damages Clauses on Right to Demand Specific Performance

12.6 RESCISSION 12.601 In General 12.602 Rescission Versus Specific Performance 12.603 Grounds for Rescission 12.604 Rescission of Sales Contracts Under the UCC 12.605 Rescission as a Remedy for Creditors 12.606 Rescission of Settlement Agreements 12.607 Rescission as a Remedy for Breach of Contract 12.608 Relief Awarded When Rescission Is Granted 12.609 Waiver of Right to Seek Rescission

12.7 RESTITUTION 12.701 In General 12.702 Return of Property or Money Held by the Defendant 12.703 Money Damages as Compensation to the Plaintiff 12.704 Return of the Full Value of the Unjust Benefit Gained by the Defendant 12.705 Imposition of a Constructive Trust

13.3 REASONS TO INCLUDE A PREDISPUTE ADR CLAUSE 13.301 More Effective Dispute Resolution Processes 13.302 The Fear Factor 13.303 The Inevitability of Conflict

13.4 CHECKLIST FOR DRAFTING AN ADR CLAUSE 13.401 Is the ADR Clause Enforceable? 13.402 Should a Standard Boilerplate ADR Clause Be Used? 13.403 Should a Multi-Step ADR Process Be Used? 13.404 What Are the Key Issues in Drafting an ADR Clause?

Editors

John V. Little, editor of this handbook and author of Chapters 1 and 9 and co-author of Chapter 10, is a principal with Michie Hamlett Lowry Rasmussen & Tweel PLLC, where he practices primarily in the areas of business and real estate law. Mr. Little earned a B.A. (magna cum laude, Phi Beta Kappa) from Washington & Lee University in 1973 and a J.D. from the University of Virginia School of Law in 1976. Mr. Little is listed in Best Lawyers in America under the categories of corporate law and real estate law.

Authors

Nicholas V. Albu, co-author of Chapter 6, is an associate in the Commercial Litigation and Disputes practice group in Reed Smith’s Northern Virginia office. He has prosecuted and defended commercial cases in federal district courts and domestic and international arbitrations. Mr. Albu’s litigation experience includes matters involving contentious breach of contract actions, joint development disagreements, construction claims, consumer protection acts, intellectual property disputes and breaches of confidentiality. Mr. Albu has also assisted in appellate matters before the Virginia Supreme Court and has handled real estate and land use cases before local bodies and state courts in Virginia. Mr. Albu is a 2009 graduate of Washington and Lee University School of Law. He was selected by his peers and the publishers of Virginia Business Magazine’s Legal Elite as one of Virginia’s best attorneys under 40 in 2013.

Francis H. Casola, Woods Rogers PLC / Roanoke (Expand/Collapse Bio)

Francis H. "Chip" Casola, author of Chapter 7, is a principal with Woods Rogers PLC, where he practices general and commercial litigation, including breach of contract, business tort, intellectual property and antitrust actions, in both federal and state courts. Before joining Woods Rogers PLC, Mr. Casola earned a B.A., magna cum laude, from Virginia Tech in 1983, worked as a law clerk to Hearing Examiners for the United States Merit Systems Protection Board for two years, and earned a J.D. from the University of Virginia School of Law in 1988, where he was named a Dillard Fellow. He is a past Chair of the Virginia State Bar's Antitrust, Franchising, and Trade Regulation Section and past member of the governing body of The Virginia Bar Association's Health Law Section. Mr. Casola is a member of the Antitrust and Litigation Sections of the American Bar Association and is a member of The Virginia Bar Association, Virginia State Bar, Roanoke Bar Association, and Virginia Association of Defense Attorneys. He is also a past President of the Roanoke Bar Association.

Thomas R. Folk, Reed Smith LLP / Falls Church (Expand/Collapse Bio)

Thomas R. Folk, co-author of Chapters 6 and 10, is a partner with Reed Smith LLP with many years of experience with difficult and complex litigation and with public-private partnerships. His practice focuses on construction, public procurement, and general litigation. He has provided legal services to a number of Virginia public entities on public procurement and construction matters, including the Counties of Arlington, Spotsylvania, and Roanoke, the City of Falls Church, the Town of Leesburg, the Alexandria City Public Schools, Stafford County Public Schools, Loudoun County Public Schools, Chesterfield County Public Schools, Warren County Public Schools and City of Manassas Public Schools.

Mr. Folk has assisted a number of Virginia jurisdictions with the Public-Private Education Facilities and Infrastructure Act of 2002 (“PPEA”), including one of the first large PPEA procurements undertaken in the Commonwealth, that by Stafford County and the Stafford County Public Schools, the Alexandria City Public Schools’ T.C. Williams Replacement Project, and projects for the Warren County Public Schools, the Chesterfield County Public Schools, the Frederick County Public Schools, the Northumberland County Public Schools, the Patrick County Public Schools, the County of Roanoke, the County of Spotsylvania, and The Winchester Parking Authority.

Before joining the firm, Mr. Folk was with the United States Army, and his assignments included Assistant to the Army General Counsel, Litigation Counsel, Officer-in-Charge of Giessen Legal Center, and Military Trial Counsel (prosecutor). He is a colonel in the United States Army Reserve. He is a former member of the Board of Governors of the Construction Law and Public Contract Section of the Virginia State Bar and has written and lectured on a number of legal topics, including government contract law. Mr. Folk graduated as a distinguished cadet from the United States Military Academy at West Point with a B.S. and earned a J.D. from the University of Virginia School of Law, where he was awarded the Law Alumni Award for graduating first in his class. Mr. Folk served on the editorial and managing boards of the Virginia Law Review.

Leigh T. Hansson, co-author of Chapter 10.6, is a partner in the Washington office of Reed Smith LLP. She has experience prosecuting and defending bid protests before the Court of Federal Claims, the Court of Appeals for the Federal Circuit, the Government Accountability Office, and various state procurement entities. She also handles matters before the Small Business Administration, claims against the government before both the Boards of Contract Appeal, and defends qui tam actions. She has counseled clients on teaming, consulting, and subcontracting agreements as well as compliance and ethics programs for government contractors. She also represents a number of corporations with export control and export compliance matters.

Ms. Hansson earned a J.D. in 1995 from Pennsylvania State University, Dickinson School of Law, where she was a 1995 recipient of the Comparative Law Award and a member of the Woolsack Honor Society. In addition, she spent time studying law at the University of Oslo in Norway. Ms. Hansson earned a B.A. in history and political science in 1992 from Hollins College.

Peter L. Henderer, co-author of Chapter 10, is a director with McCandlish Holton, P.C. in Richmond. He earned an A.B. in 1993 from Bowdoin College and a J.D. in 1996 from the George Washington University Law School. Mr. Henderer’s practice focuses on commercial real estate development and finance.

Lynn Kachel, author of Chapter 8 and Appendix 11-2, is a sole practitioner in the greater Richmond area. Before starting her own practice, she assisted clients with general corporate matters, mergers and acquisitions, securities law, and capital formation as an Associate with Williams, Mullen (Richmond); and then with Mezzullo & McCandlish (Richmond). She currently focuses on a limited number of small business clients. In addition to her law practice, Ms. Kachel is a registered representative (Series 7) and a partner in Wealth Management Strategies, LLP (securities and advisory services offered through Commonwealth Financial Network, Member NASD, SIPC). Ms. Kachel graduated from the University of Richmond School of Law, where she served as Managing Editor of the University of Richmond Law Review and was inducted into the McNeill Law Honor Society. Ms. Kachel has been a member of the Virginia State Bar since 1994.

John A. C. Keith, author of Chapter 13, is a principal with Blankingship & Keith in Fairfax. He is a member of the McCammon Group and a certified mediator, and practices in the areas of civil litigation, business law, and wills, trusts, and estates. Mr. Keith earned a B.A. in 1968 and a J.D. in 1974 from the University of Virginia. Mr. Keith is listed in Best Lawyers in America and among the “Legal Elite” by Virginia Business magazine. He served as President of the Virginia State Bar from 1998 to 1999 and is a Fellow of the Virginia Law Foundation where he has also served on the board of directors.

Elizabeth G. Leavy, co-author of Chapter 10.6, is an associate in Reed Smith’s Global Regulatory Enforcement Practice Group. In her government contracts practices, Ms. Leavy assists federal contractors and subcontractors in bid protests before the GAO and federal and state agencies. She represents clients on Contract Disputes Act (CDA) claims before the boards of contract appeals, including the ASBCA and the PSBCA. Ms. Leavy also regularly counsels clients on regulatory compliance issues and alleged violations of the FAR, HIPAA, Truth in Negotiations Act (“TINA”), Service Contract Act (“SCA”), Davis-Bacon Act, and the False Claims Act (“FCA”). Shee received her law degree from Cornell Law School and a B.A. from George Washington University. She is admitted to practice in the District of Columbia, New Jersey, and New York.

Thomas A. Leggette, co-author of Chapter 10, is a solo practitioner in Falls Church with 39 years of experience. He is a former principal at Woods Rogers PLC, where he served as chair of the firm’s litigation section and was primarily involved in handling commercial litigation and insurance defense. Since going solo Mr. Leggette has received just under 10 verdicts in civil RICO cases. He also is now involved in Trust, Wills, Estates, Elder Law, and Consumer Law. He is a graduate of Virginia Polytechnic Institute and the University of Virginia School of Law. Mr. Leggette has been a frequent speaker and author for Virginia CLE, Nonprofit Governance Center, and numerous other organizations on attorney-client privilege, legal ethics, and civil litigation. He served for seven years as editor of the Federal Defense and Corporate Counsel’s Update. He is a member of the American Bar Association, National Academy of Elder Law Attorneys, McLean Estate Planning Council, and the Northern Virginia Estate Plaining Council.

Mark D. Loftis, Woods Rogers PLC / Roanoke (Expand/Collapse Bio)

Mark D. Loftis, author of Chapter 12, is a principal in the Roanoke office of Woods Rogers PLC and the chair of the firm’s litigation section. Mr. Loftis practices primarily in the areas of product liability, commercial litigation, and insurance coverage litigation. He has extensive experience representing product manufacturers, product retailers, and utility companies in litigation matters in both state and federal courts. Mr. Loftis is a past president of the Virginia Association of Defense Attorneys (2005 to 2006), and continues to be active in that organization. He is also a member of the American Bar Association, the Virginia Bar Association, the Virginia State Bar, and the Defense Research Institute. Mr. Loftis frequently writes and lectures on warranty, contract, and technology law issues. He is listed in Best Lawyers in America and has been named a Virginia Super Lawyer in the area of product liability defense. He is also a fellow of the Virginia Law Foundation and a fellow of the American Bar Foundation. His pro bono work includes serving as the chancellor of the Episcopal Diocese of Southwestern Virginia. Mr. Loftis received his undergraduate degree from Georgetown University, with honors, and received his law degree from the University of Virginia School of Law.

Edward B. Lowry, author of Chapter 14 and co-author of Chapter 10, practices in the area of business litigation, including contracts, securities arbitration, antitrust and other forms of unfair competition, intellectual property disputes, business torts, employment law, and business transaction negotiations. He earned a B.A. in 1968 from the University of Virginia and a J.D. in 1971 from the University of Virginia School of Law, where he was a member of the editorial board of the Virginia Law Review. Mr. Lowry is a member of the Virginia State Bar and has served as President, Member of the Council, Member of the Executive Committee, Member of the Affiliated Professions Committee, and Chair of the Judicial Nominations Committee. He is a Fellow of the International Academy of Trial Lawyers, the American College of Trial Lawyers, the American Bar Foundation, and the Virginia Law Foundation. He also served as a member of the Judicial Council of the Virginia Advisory Committee on Rules of Court. Mr. Lowry has served as an adjunct faculty member of the University of Virginia School of Law and a faculty member of the Virginia State Bar Course on Professionalism.

Charles V. McPhillips, author of Chapter 11 and Appendices 11-1, 11-5, and 11-7, is the executive vice president of Practice Management at Kaufman & Canoles, P.C., where his practice emphasizes commercial transactions, business organizations, public-private partnerships and international business law. Mr. McPhillips is a trustee of Hampden-Sydney College, chairman of the McMahon-Parater Foundation and the Investing in Our Children campaign of the Diocese of Richmond, chairman of the Barry Robinson Center, vice president of Greater Norfolk Corporation, second vice president of the Norfolk Forum, a past chairman of the Board of Governors of the International Practice Section of the Virginia State Bar, past chairman of the International Business Council of the Hampton Roads Chamber of Commerce, past president of the Board of Trustees of the Virginia Stage Company, founding chairman of Saint Patrick Catholic School, chairman of the James Barry-Robinson Home for Boys Trust, former vice president of the World Affairs Council of Hampton Roads, and board member of various civic organizations. He was also president of the Virginia Club at the time that historic organization (founded 1873) moved to its present quarters. Mr. McPhillips earned a B.A. in political science from Hampden-Sydney College in 1982, where he was elected to Phi Beta Kappa and to Omicron Delta Kappa National Leadership Society. He then attended the University of Virginia School of Law, where he was elected to the Order of the Coif upon his graduation in 1985.

Christopher A. Olcott, co-author of Chapter 10, is an Associate with McCandlish Holton, P.C. in Richmond. His practice is concentrated in commercial real estate development and health care. He received a B.S. in 2011 from the University of Virginia and a J.D. in 2014 from William & Mary Law School.

Carrie Hallberg O’Malley, co-author of Chapters 2 and 10 and Appendices 11-3 and 11-4, is a partner in the commercial real estate and finance practice at Hirschler Fleischer with more than 15 years of legal and business experience in commercial real estate transactions. Ms. O’Malley joined Hirschler Fleischer’s Richmond office as a summer clerk and began her practice in the firm’s Commercial Real Estate and Finance Section in the fall of 1996. After an 18-month sabbatical during which she served as counsel and vice president of the Richmond National Title Services Division of Fidelity National Title Insurance Company, she returned to Hirschler Fleischer in 2004 to practice in the firm’s Fredericksburg office. Ms. O’Malley concentrates her practice on complex real estate acquisitions, sales, financings and securitizations; loan portfolio acquisitions, sales and servicing transactions; commercial leasing matters; section 1031 like-kind exchanges; workouts; defeasances; and telecommunications law.

Ms. O’Malley received her B.S.B.A. with concentrations in finance and marketing from the E. Claiborne Robins School of Business at the University of Richmond in 1991. In 1996, she received her law degree from the T.C. Williams School of Law and her Master of Business Administration from the Richard S. Reynolds Graduate School of Business at the University of Richmond, in a four-year joint degree program which she completed after only three years of study.

Ms. O’Malley has been recognized among the “Legal Elite” by Virginia Business magazine and has been named a “Legal Rising Star” by Law & Politics. In 2009, she received the Women of Distinction Award in Law from the Girl Scout Commonwealth Council of Virginia, and in 2010 she was selected by Virginia Lawyers Media as one of the “Influential Women of Virginia.”

Eric C. Perkins, Perkins Law PLLC / Richmond (Expand/Collapse Bio)

Eric C. Perkins, Esq., is the author of Chapter 5 and Appendix 11-6 and a co-author of Chapter 10. He is the founding owner of Perkins Law PLLC, a small business, franchising, and nonprofit law firm. Mr. Perkins’ practice focuses on business contracts, transactions and compliance matters for small businesses and nonprofit organizations. He serves clients in variety of industries, ranging from real estate, professional services, information technology, restaurants, youth sports, senior care, transportation, to professional wrestling. Mr. Perkins is a frequent author and speaker on a variety of business and nonprofit law topics. He chairs the national Tennis Rules and Regulations Committee for the United States Tennis Association and is a member of the ABA Forum on Franchising, Virginia Franchise Forum, Henrico Business Leaders, Greater Richmond Chamber of Commerce, Center for Nonprofit Excellence, ConnectVA, Richmond Tennis Association, and Short Pump Rotary Club.

Jane Whitt Sellers, McGuireWoods LLP / Richmond (Expand/Collapse Bio)

Jane Whitt Sellers, author of Chapter 4, co-author of Chapter 10, and Appendices 11-9 through 11-12, is a partner in the Corporate Services department of McGuireWoods LLP. She has substantial experience in working with public and private companies and their boards on corporate finance matters, securities compliance, mergers and acquisitions, and corporate governance. She has represented issuers in a wide range of financing transactions including syndicated loan agreements and public and private offerings (including Rule 144A offerings) of debt and equity securities as well as hybrid securities such as equity units, convertible notes, junior subordinated notes, and trust preferred securities. Her experience also includes equity self-tenders and other repurchases as well as liability management transactions such as tender and exchange offers and consent solicitations for outstanding debt securities.

Ms. Sellers advises on 1934 Act reporting and proxy statements, shareholder proposals, proxy contests, and executive compensation disclosures. She is on the firm’s climate change team, advising on SEC disclosures and due diligence matters. Corporate governance issues in which she has been involved include majority vote for director elections, shareholder-called special meetings, proxy access and majority written consents. Her mergers and acquisitions experience includes stock and asset acquisitions and divestitures, including spin-offs, as well as corporate level mergers.

Ms. Sellers earned a B.A., cum laude, from Hollins College in 1975, an M.S. from Virginia Polytechnic Institute in 1977, and a J.D. from the University of Virginia School of Law in 1980, where she was elected to the Order of the Coif. She is a member of the Virginia State Bar, the North Carolina State Bar, and various state and local bar associations in Virginia and North Carolina. Ms. Sellers is admitted to practice before Virginia and North Carolina courts, the Fourth Circuit Court of Appeals, the United States District Courts for the Eastern and Western Districts of Virginia, and the United States Bankruptcy Courts for the Eastern and Western Districts of Virginia.

Michael H. Terry, co-author of Chapters 2, 3, and 10, and Appendices 11-3 and 11-4, is a partner, member of the Board of Directors, the Executive Committee, and Past Chairman of the Commercial Real Estate and Finance Section of Hirschler Fleischer, P.C., where he practices in the areas of commercial real estate and workouts and reorganizations. Mr. Terry represents several lending institutions and investors in connection with their loans and investments in Virginia and throughout the southeast. He also represents developers, property owners and tenants in connection with the acquisition, development, financing and leasing of income producing property and raw land for office complexes, corporate headquarters, planned unit developments and retail projects.

Mr. Terry earned a B.A. (magna cum laude, Phi Beta Kappa) from the University of Richmond in 1978 and a J.D. from the Marshall-Wythe School of Law at the College of William and Mary in 1982. Mr. Terry is a frequent lecturer on various real estate law topics and is listed in Best Lawyers in America under the category of real estate law, and as leading Individual (Real Estate) in Chambers & Partners, America’s Leading Lawyers for Business (since 2004). Mr. Terry is also a member of the Richmond Real Estate Group and the American College of Real Estate Lawyers.

Anne M. Vaughan, co-author of Chapters 3 and 10, and Appendices 11-3 and 11-4, is an of-counsel attorney with Hirschler Fleischer, P.C. She practices in the Commercial Real Estate and Finance Section, with a focus in the areas of commercial real estate acquisitions, sales, negotiations, property assemblages, leasing agreements, financings and planned unit developments. Ms. Vaughan earned a B.A., cum laude, from Georgetown University in 1992 and a J.D., with honors, from the George Washington University Law School in 1997. Ms. Vaughan is a member of the American Bar Association, the Virginia Bar Association, the Richmond Bar Association, the Washington State Bar Association, and the District of Columbia Bar Association.